Mar 31, 2018
Note 1.1 - Significant Accounting Policies
I Basis of preparation and presentation
The financial statements have been prepared on accrual basis under the historical cost basis except for certain financial instruments which are measured at fair value at the end of each reporting period.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
II Revenue recognition
Sale of goods : Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment, net of returns and allowances, trade discounts and volume rebates.
Sales include excise duty but exclude sales tax, value added tax, central goods and service tax, state goods and service tax and integrated goods and service tax. Revenue is reduced for rebates and discounts.
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs can be estimated reliably, there is no continuing management involvement with the goods nor it exercises effective control over the goods and the amount of revenue can be measured reliably. The timing of the transfer of risks and rewards varies depending on the individual terms of the sales arrangements.
Income from brand franchise are recognised in terms of the respective contracts on sale of the products by the Franchisees.
Other operating income : Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.
Income from services : Revenues from bottling contracts with brand franchise are recognised when services are rendered and related costs are incurred.
Other income : Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.
III Property, plant and equipment
i. Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation and impairment losses, if any.
All items of property, plant and equipment have been measured at fair value at the date of transition to Ind-AS. The Company have opted for such fair valuation as deemed cost as at the transition date i.e. April 01, 2016.
Cost is inclusive of inward freight, duties and taxes and incidental expenses related to acquisition or construction. All upgradation / enhancements are charged off as revenue expenditure unless they bring similar significant additional benefits. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss. Depreciation of these assets commences when the assets are ready for their intended use which is generally on commissioning. Items of property, plant and equipment are depreciated in a manner that amortizes the cost (or other amount substituted for cost) of the assets after commissioning, less its residual value, over their useful lives as specified in Schedule II of the Companies Act, 2013 on a straight line basis.â
ii. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets.
iii. Capital work-in-progress
Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
IV Intangible assets :
Intangible assets under development
Intangible assets are recognised when the entity controls the assets, it is probable that future economic benefits attributed to the asset will flow to the entity and the cost of the asset can be reliably measured.
Expenditure on intangible assets eligible for capitalisation are carried as Intangible assets under development where such assets are not yet ready for their intended use and are carried at cost.â
V A. Depreciation / amortisation
i. Depreciation has been provided on the cost of the assets less their residual values on straight line method on the basis of estimated useful life of the assets as presecribed in Schedule II to the Companies Act, 2013.
ii. Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
B. Impairment
(i) Financial assets
The Company recognizes loss allowance for trade receivables with no significant financing component at an amount equal to lifetime expected credit loss.
(ii) Non - financial assets
Tangible and intangible assets
Property, plant and equipment and intangible assets are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis to determine the extent of the impairment loss (if any). An impairment loss is recognised in the statement of profit or loss. The Company review/assess at each reporting date if there is any indication that an asset may be impaired.
VI Foreign currency transactions
Transactions in foreign currency are recorded on initial recognition at the exchange rate prevailing at the time of transaction.
Monetary items (i.e. trade receivables) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date.
The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded / reported in previous financial statements are recognised as income/ expense in the period in which they arise.
VII Financial instruments Initial recognition
âFinancial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of financial asset or financial liabilities, as appropriate, on initial recognition.
Investments in subsidiary are carried at cost at the time of intitial recognition in the financial statements.
Subsequent measurement
(i) Financial assets carried at amortised cost : A financial asset is subsequently measured at amortised cost if it is held in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets carried at fair value through other comprehensive income (FVTOCI): A financial asset is subsequently measured at FVTOCI if it is held not only for collection of cash flows arising from payments of principal and interest but also from the sale of such assets. Such assets are subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value being recognised in other comprehensive income.
(iii) Financial assets carried at fair value through profit or loss (FVTPL): A financial asset which is not classified in any of the above categories (i.e. amortised cost or through other comprehensive income) are subsequently measured at fair value through profit or loss.
(iv) Investment in subsidiary : Investment in subsidiary is carried at cost less impairment, if any, in the separate financial statements.
(v) Financial liabilities : Financial liabilities are subsequently measured at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
VIII Impairment of investments
The Company reviews its carrying value of long term investments in equity shares of subsidiary carried at cost at the end of each reporting period. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
IX Inventories
Inventories are valued at the lower of cost (weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary.
Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.
X Employee benefits
The Company has various schemes of employee benefits such as provident fund, employee state insurance scheme and gratuity fund, which are dealt with as under:
i. The Companyâs contribution to provident fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
ii. For defined benefit plans in the form of gratuity fund the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.
iii. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive which are expected to occur within twelve months after the end of the period in which the employee renders the related service.
The cost of short-term compensated absences is accounted when the absences occur.
XI Contingent assets/liabilities and provisions
Contingent assets are not recognised. However, when realisation of income is virtually certain, then the related asset is no longer a contingent asset, and is ecognised as an asset.
Contingent liabilities are disclosed after evaluation of the facts and legal aspects of the matter involved, in line with the provisions of Ind AS 37. The Company records a liability for any claims where a potential loss probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosures in the financial statements but does not record a liability in its financial statements unless the loss becomes probable.
Provisions are recognised when the Company has a present obligation (legal / constructive) as a result of a past event, for which it is probable that a cash outflow may be required and a reliable estimate can be made of the amount of the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
XII Leases
Lease payments under operating leases are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the Companyâs benefit. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
Financial lease transactions entered are considered as financial arrangements and the leased assets are capitalised on an amount equal to the present value of future lease payments and corresponding amount is recognised as a liability. The lease payments made are apportioned between finance charge and reduction of outstanding liability in relation to leased asset.
XIII Earnings per share
Basic earnings / (loss) per share is calculated by dividing the net profit / (loss) for the current year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average share considered for calculating basic earnings / (loss) per share, and also the weighted average number of shares, which would have been issued on the conversion of all dilutive potential equity shares.
XIV Income taxes
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss i.e. in other comprehensive income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.
âDeferred tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the reporting date. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is nolonger probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss i.e. in other comprehensive income.
Deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.â
XV Use of estimates and judgement
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:
(i) Useful lives and residual value of property, plant and equipment and intangible assets:
Useful life and residual value are determined by the management based on a technical evaluation considering nature of asset, past experience, estimated usage of the asset, vendorâs advice etc and same is reviewed at each financial year end.
(ii) Impairment of investments :
The Company has reviewed its carrying value of long term investments in equity of subsidiary carried at cost at the end of each reporting period. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
(iii) Deferred tax assets :
The Company has reviewed the carrying amount of deferred tax assets including MAT credit entitlement at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
XVI Operating cycle
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
XVII Government grants and subsidies
âGovernment grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with.
A government grant that becomes receivable as compensation for expenses or losses incurred in a previous period. Such a grant is recognised in pro It or loss of the period in which it becomes receivable.
Government grants shall be recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.
Government grants and subsidies are recognised as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis.â
XVIII Borrowing costs
Borrowing costs include interest and amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss as and when incurred. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.
XIX Derivative contracts
The Company enters into derivative contracts in the nature of foreign currency forward contracts with an intention to manage its exposure to foreign currency rate risks. Further details of derivative fnancial instruments are disclosed in note 40.
The Company uses derivative financial instruments, such as forward currency contracts to manage its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
XX Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short- term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
XXI Recent accounting pronouncement issued but not yet effective upto the date of issuance of financial statements
âIn March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115, âRevenue from Contracts with Customersâ (a new revenue standard) and Appendix B to Ind AS 21, âForeign Currency Transactions and Advance Considerationâ. These amendments are applicable to the Group from April 1, 2018.
Ind AS 115 obliges the Group to book its revenue from customers on the 5 step model. The objective of this Standard is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.
The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
Basis the operations of the Company, this Ind AS is not applicable to the Company.
Appendix B to Ind AS 21, Foreign Currency Transactions and Advance Consideration
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
There is no impact on the Company due to notification of this Appendix.â
Mar 31, 2016
Note Particulars
1 Corporate information
Globus Spirits Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act. The Company is primarily engaged in the business of manufacture and sale of Indian Made Indian Liquor (IMIL), Indian Made Foreign Liquor (IMFL), Bulk Alcohol and Franchise Bottling.
2 Significant accounting policies
2.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
2.2 Use of estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.
2.3 Inventories
Inventories are valued at the lower of cost (weighted average basis) and the net realizable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.
2.4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
2.5 Cash flow statement
Cash flows are reported using the indirect method, whereby profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.6 Depreciation and amortization
''Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
Intangible assets of "Knowhow and new brand development" are amortized over their estimated useful life of 5 year.
The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any.
2.7 Revenue recognition Sale of goods
Sales are recognized, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the dispatch of goods to customers. Sales include excise duty but exclude sales tax and value added tax.
Income arising from sales by manufacturers under "Tie-up" agreements (Tie-up units) and income from brand franchise are recognised in terms of the respective contracts on sale of the products by the Tie-up units / Franchisees.
Sale of services
Revenues from bottling contracts with brand franchise are recognized when services are rendered and related costs are incurred.
2.8 Other income
Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.
2.9 Fixed Assets (Tangible / Intangible)
Fixed assets, are carried at cost less accumulated depreciation / amortization and impairment losses, if any. The cost of fixed assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure on fixed assets after its purchase / completion is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately.
Capital work-in-progress:
Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
2.10 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.
Measurement at the balance sheet date
Foreign currency monetary items (other than derivative contracts) of the Company, outstanding at the balance sheet date are restated at the year-end rates. Nonmonetary items of the Company are carried at historical cost.
Treatment of exchange differences
Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.
Accounting for forward contracts
Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortized over the period of the contracts if such contracts relate to monetary items as at the balance sheet date. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense in the period in which such cancellation or renewal is made.
2.11 Government grants, subsidies and export incentives
Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.
Government grants and subsidies are recognized as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis.
2.12 Investments
Long-term investments, are carried individually at cost less provision for decline, other than temporary, in the carrying value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.
2.13 E m ployee benefits
Employee benefits include provident fund, employee state insurance scheme and gratuity fund.
Defined contribution plans
The Company''s contribution to provident fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
Defined benefit plans
For defined benefit plans in the form of gratuity fund the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur.
Short-term employee benefits
"The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of short-term compensated absences is accounted when the absences occur."
2.14 Borrowing costs
Borrowing costs include interest, amortization of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset are added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.
2.15 Segment reporting
Based on the guiding principles given in Accounting Standard on ''Segment Reporting'' (AS-17), the Company''s primary business segment is Industrial and Potable Alcohol. The alcohol business incorporates product groups viz. IMIL, IMFL, Bulk Alcohol and Franchise operations, which mainly have similar risks and returns. As the Company''s business activity falls within a single primary business segment the disclosure requirements of AS -17 in this regard are not applicable.
2.16 Leases
"Assets leased by the Company in its capacity as a lessee, where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight-line basis over the lease term."
2.17 Earnings per share
"Basic earnings per share is computed by dividing the profit after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented."
2.18 Taxes on income
"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company."
Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realize the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their reliability.
2.19 Impairment of assets
"The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists. The following intangible assets are tested for impairment each financial year even if there is no indication that the asset is impaired:(a) an intangible asset that is not yet available for use; and (b) an intangible asset that is amortized over a period exceeding ten years from the date when the asset is available for use. If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognized for such excess amount. The impairment loss is recognized as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognized."
2.20 Provisions and contingencies
A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognized in the financial statements.
2.21 Derivative contracts
"The Company enters into derivative contracts in the nature of foreign currency forward contracts with an intention to hedge its existing assets and liabilities, firm commitments and highly probable transactions in foreign currency. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign currency transactions and translations. All other derivative contracts are marked-to-market and losses are recognized in the Statement of Profit and Loss. Gains arising on the same are not recognized, until realized, on grounds of prudence."
2.22 Service tax input credit
Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilizing the credits.
2.23 Operating Cycle
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current
Mar 31, 2015
1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956
Act"), as applicable. The financial statements have been prepared on
accrual basis under the historical cost convention. The accounting
policies adopted in the preparation of the financial statements are
consistent with those followed in the previous year.
1.2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
1.3 Inventories
Inventories are valued at the lower of cost (weighted average basis)
and the net realisable value after providing for obsolescence and other
losses, where considered necessary. Cost includes all charges in
bringing the goods to the point of sale, including octroi and other
levies, transit insurance and receiving charges. Work-in- progress and
finished goods include appropriate proportion of overheads and, where
applicable, excise duty.
1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.5 Cash flow statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from operating, investing and financing
activities of the Company are segregated based on the available
information.
1.6 Depreciation and amortisation
Depreciable amount for assets is the cost of an asset, or other amount
substituted for cost, less its estimated residual value. Depreciation
on tangible fixed assets has been provided on the straight-line method
as per the useful life prescribed in Schedule II to the Companies Act,
2013.
Intangible assets of "Knowhow and new brand development" are amortised
over their estimated useful life of 5 year. The estimated useful life
of the intangible assets and the amortisation period are reviewed at
the end of each financial year and the amortisation period is revised
to reflect the changed pattern, if any.
1.7 Revenue recognition
Sale of goods
Sales are recognised, on transfer of significant risks and rewards of
ownership to the buyer, which generally coincides with the dispatch of
goods to customers. Sales include excise duty but exclude sales tax and
value added tax.
Income arising from sales by manufacturers under "Tie-up" agreements
(Tie-up units) and income from brand franchise are recognised in terms
of the respective contracts on sale of the products by the Tie-up units
/ Franchisees.
Sale of services
Revenues from bottling contracts with brand franchise are recognised
when services are rendered and related costs are incurred.
1.8 Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
1.9 Fixed Assets (Tangible / Intangible)
Fixed assets, are carried at cost less accumulated depreciation /
amortisation and impairment losses, if any. The cost of fixed assets
comprises its purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those subsequently
recoverable from the tax authorities), any directly attributable
expenditure on making the asset ready for its intended use, other
incidental expenses and interest on borrowings attributable to
acquisition of qualifying fixed assets up to the date the asset is
ready for its intended use. Machinery spares which can be used only in
connection with an item of fixed asset and whose use is expected to be
irregular are capitalised and depreciated over the useful life of the
principal item of the relevant assets. Subsequent expenditure on fixed
assets after its purchase / completion is capitalised only if such
expenditure results in an increase in the future benefits from such
asset beyond its previously assessed standard of performance. Fixed
assets retired from active use and held for sale are stated at the
lower of their net book value and net realisable value and are
disclosed separately. Capital work-in-progress:
Projects under which tangible fixed assets are not yet ready for their
intended use are carried at cost, comprising direct cost, related
incidental expenses and attributable interest.
1.10 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the
transaction or at rates that closely approximate the rate at the date
of the transaction. Measurement at the balance sheet date Foreign
currency monetary items (other than derivative contracts) of the
Company, outstanding at the balance sheet date are restated at the
year-end rates. Non- monetary items of the Company are carried at
historical cost.
Treatment of exchange differences Exchange differences arising on
settlement / restatement of foreign currency monetary assets and
liabilities of the Company are recognised as income or expense in the
Statement of Profit and Loss. Accounting for forward contracts Premium
/ discount on forward exchange contracts, which are not intended for
trading or speculation purposes, are charged to the statement of profit
and loss. Any profit or loss arising on cancellation or renewal of
such a forward exchange contract is recognised as income or as expense
in the period in which such cancellation or renewal is made.
1.11 Government grants, subsidies and export incentives
Export benefits are accounted for in the year of exports based on
eligibility and when there is no uncertainty in receiving the same.
Government grants and subsidies are recognised as income over the
periods necessary to match them with the costs for which they are
intended to compensate, on a systematic basis.
1.12 Investments
Long-term investments, are carried individually at cost less provision
for decline, other than temporary, in the carrying value of such
investments. Current investments are carried individually, at the lower
of cost and fair value. Cost of investments include acquisition charges
such as brokerage, fees and duties.
1.13 Employee benefits
Employee benefits include provident fund, employee state insurance
scheme and gratuity fund. Defined contribution plans
The Company's contribution to provident fund and employee state
insurance scheme are considered as defined contribution plans and are
charged as an expense based on the amount of contribution required to
be made and when services are rendered by the employees. Defined
benefit plans
For defined benefit plans in the form of gratuity fund the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each balance
sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Short-term
employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service. The cost of short-term
compensated absences is accounted when the absences occur
1.14 Borrowing costs
Borrowing costs include interest. Costs in connection with the
borrowing of funds are charged to the Statement of Profit and Loss .
Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset up to the date of
capitalisation of such asset are added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
1.15 Segment reporting
Based on the guiding principles given in Accounting Standard on
'Segment Reporting' (AS-17), the Company's primary business segment is
Industrial and Potable Alcohol. The alcohol business incorporates
product groups viz. IMIL (Indian made india Liquor), IMFL (Indian Made
foreign Liquor), Bulk Alcohol and Franchise operations, which mainly
have similar risks and returns. As the Company's business activity
falls within a single primary business segment the disclosure
requirements of AS -17 in this regard are not applicable.
1.16 Leases
Assets leased by the Company in its capacity as a lessee, where
substantially all the risks and rewards of ownership vest in the
Company are classified as finance leases. Such leases are capitalised
at the inception of the lease at the lower of the fair value and the
present value of the minimum lease payments and a liability is created
for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost so as to obtain a constant periodic
rate of interest on the outstanding liability for each year. Lease
arrangements where the risks and rewards incidental to ownership of an
asset substantially vest with the lessor are recognised as operating
leases. Lease rentals under operating leases are recognised in the
Statement of Profit and Loss on a straight-line basis over the lease
term.
1.17 Earnings per share
Basic earnings per share is computed by dividing the profit after tax
(including the post tax effect of extraordinary items, if any) by the
weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit after tax
(including the post tax effect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to expense or income
(net of any attributable taxes) relating to the dilutive potential
equity shares, by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted
average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net profit per share from continuing ordinary
operations. Potential dilutive equity shares are deemed to be converted
as at the beginning of the period, unless they have been issued at a
later date. Dilutive potential equity shares are determined
independently for each period presented.
1.18 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the applicable tax rates and the
provisions of the Income Tax Act, 1961 and other applicable tax
laws.Minimum Alternate Tax (MAT) paid in accordance with the tax laws,
which gives future economic benefits in the form of adjustment to
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance Sheet when it
is highly probable that future economic benefit associated with it will
flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realised. However, if
there are unabsorbed depreciation and carry forward of losses and items
relating to capital losses, deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that there
will be sufficient future taxable income available to realise the
assets. Deferred tax assets and liabilities are offset if such items
relate to taxes on income levied by the same governing tax laws and the
Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each balance sheet date for their reliability.
1.19 Impairment of assets
The carrying values of assets / cash generating units at each balance
sheet date are reviewed for impairment if any indication of impairment
exists. The following intangible assets are tested for impairment each
financial year even if there is no indication that the asset is
impaired: (a) an intangible asset that is not yet available for use;
and (b) an intangible asset that is amortised over a period exceeding
ten years from the date when the asset is available for use. If the
carrying amount of the assets exceed the estimated recoverable amount,
an impairment is recognised for such excess amount. The impairment loss
is recognised as an expense in the Statement of Profit and Loss, unless
the asset is carried at revalued amount, in which case any impairment
loss of the revalued asset is treated as a revaluation decrease to the
extent a revaluation reserve is available for that asset.The
recoverable amount is the greater of the net selling price and their
value in use. Value in use is arrived at by discounting the future cash
flows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognised for an
asset in earlier accounting periods no longer exists or may have
decreased, such reversal of impairment loss is recognised in the
Statement of Profit and Loss, to the extent the amount was previously
charged to the Statement of Profit and Loss. In case of revalued
assets such reversal is not recognised.
1.20Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes. Contingent assets are not recognised in the
financial statements.
1.21Derivative contracts
The Company enters into derivative contracts in the nature of foreign
currency forward contracts with an intention to hedge its existing
assets and liabilities, firm commitments and highly probable
transactions in foreign currency. Derivative contracts which are
closely linked to the existing assets and liabilities are accounted as
per the policy stated for Foreign currency transactions and
translations. All other derivative contracts are marked-to-market and
losses are recognised in the Statement of Profit and Loss. Gains
arising on the same are not recognised, until realised, on grounds of
prudence.
1.22Share issue expenses
Share issue expenses are adjusted against the Securities Premium
Account as permissible under Section 52 of the Companies Act, 2013.
1.23 Operating Cycle
Based on the nature of products / activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non-current.
Mar 31, 2014
1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which
continue to be applicable in respect of Section 133 of the Companies
Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated
13 September, 2013 of the Ministry of Corporate Affairs) and the
relevant provisions of the 1956 Act/ 2013 Act, as applicable. The
financial statements have been prepared on accrual basis under the
historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
2.2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
2.3 Inventories
Inventories are valued at the lower of cost (weighted average basis)
and the net realisable value after providing for obsolescence and other
losses, where considered necessary. Cost includes all charges in
bringing the goods to the point of sale, including octroi and other
levies, transit insurance and receiving charges. Work-in- progress and
finished goods include appropriate proportion of overheads and, where
applicable, excise duty.
2.4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
2.5 Cash flow statement
Cash flows are reported using the indirect method, whereby profit
before extraordinary items and tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Company are segregated based
on the available information.
2.6 Depreciation and amortisation
Depreciation has been provided on the straight-line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956. Assets
costing less than Rs. 5,000 each are fully depreciated in the year of
capitalisation
Intangible assets of "Knowhow and new brand development" are amortised
over their estimated useful life of 5 years.
The estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each financial year and the
amortisation method is revised to reflect the changed pattern.
2.7 Revenue recognition
Sale of goods
Sales are recognised, on transfer of significant risks and rewards of
ownership to the buyer, which generally coincides with the dispatch of
goods to customers. Sales include excise duty but exclude sales tax and
value added tax.
Income arising from sales under "Tie-up" agreements (Tie- up units) and
income from brand franchise are recognised in terms of the respective
contracts on sale of the products by the Tie-up units / Franchisees.
Sale of services
Revenues from bottling contracts with brand franchise are recognised
when services are rendered and related costs are incurred.
2.8 Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
2.9 Fixed Assets (Tangible / Intangible)
Fixed assets, are carried at cost less accumulated depreciation /
amortisation and impairment losses, if any. The cost of fixed assets
comprises its purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those subsequently
recoverable from the tax authorities), any directly attributable
expenditure on making the asset ready for its intended use, other
incidental expenses and interest on borrowings attributable to
acquisition of qualifying fixed assets up to the date the asset is
ready for its intended use. Machinery spares which can be used only in
connection with an item of fixed asset and whose use is expected to be
irregular are capitalised and depreciated over the useful life of the
principal item of the relevant assets. Subsequent expenditure on fixed
assets after its purchase / completion is capitalised only if such
expenditure results in an increase in the future benefits from such
asset beyond its previously assessed standard of performance.
Capital work-in-progress:
Projects under which tangible fixed assets are not yet ready for their
intended use are carried at cost, comprising direct cost, related
incidental expenses and attributable interest.
2.10 Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company are
accounted at the exchange rates prevailing on the date of the
transaction or at rates that closely approximate the rate at the date
of the transaction.
Measurement at the balance sheet date
Foreign currency monetary items (other than derivative contracts) of
the Company, outstanding at the balance sheet date are restated at the
year-end rates. Non- monetary items of the Company are carried at
historical cost.
Treatment of exchange differences
Exchange differences arising on settlement / restatement of foreign
currency monetary assets and liabilities of the Company are recognised
as income or expense in the Statement of Profit and Loss.
Accounting for forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the balance sheet date.
2.11 Government grants, subsidies and export incentives
Export benefits are accounted for in the year of exports based on
eligibility and when there is no uncertainty in receiving the same.
Government grants and subsidies are recognised as income over the
periods necessary to match them with the costs for which they are
intended to compensate, on a systematic basis.
2.12 Investments
Long-term investments, are carried individually at cost less provision
for decline, other than temporary, in the the carrying value of such
investments. Current investments are carried individually, at the lower
of cost and fair value. Cost of investments include acquisition charges
such as brokerage, fees and duties.
2.13 Employee benefits
Employee benefits include provident fund, employee state insurance
scheme and gratuity fund.
Defined contribution plans
The Company''s contribution to provident fund and employee state
insurance scheme are considered as defined contribution plans and are
charged as an expense based on the amount of contribution required to
be made and when services are rendered by the employees.
Defined benefit plans
For defined benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each balance
sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur.
Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive which is expected to occur within twelve
months after the end of the period in which the employee renders the
related service.
2.14 Borrowing costs
Borrowing costs include interest costs. Costs in connection with the
borrowing of funds to the extent not directly related to the
acquisition of qualifying assets are charged to the Statement of Profit
and Loss over the tenure of the loan. Borrowing costs, allocated to and
utilised for qualifying assets, pertaining to the period from
commencement of activities relating to construction / development of
the qualifying asset upto the date of capitalisation of such asset are
added to the cost of the assets. Capitalisation of borrowing costs is
suspended and charged to the Statement of Profit and Loss during
extended periods when active development activity on the qualifying
assets is interrupted.
2.15 Segment reporting
Based on the guiding principles given in Accounting Standard on
''Segment Reporting'' (AS-17), the Company''s primary business segment is
Industrial and Potable Alcohol. The alcohol business incorporates
product groups viz. IMIL, IMFL, Bulk Alcohol and Franchise operations,
which mainly have similar risks and returns. As the Company''s business
activity falls within a single primary business segment the disclosure
requirements of AS -17 in this regard are not applicable.
2.16 Leases
"Assets leased by the Company in its capacity as a lessee,
where substantially all the risks and rewards of ownership vest in the
Company are classified as finance leases. Such leases are capitalised
at the inception of the lease at the lower of the fair value and the
present value of the minimum lease payments and a liability is created
for an equivalent amount. Each lease rental paid is allocated between
the liability and the interest cost so as to obtain a constant periodic
rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis."
2.17 Earnings per share
"Basic earnings per share is computed by dividing the profit after tax
(including the post tax effect of extraordinary items, if any) by the
weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit after tax
(including the post tax effect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to expense or income
(net of any attributable taxes) relating to the dilutive potential
equity shares, by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted
average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share
from continuing ordinary operations. Potential dilutive equity shares
are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date. Dilutive potential equity shares
are determined independently for each period presented."
2.19 Taxes on income
"Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is highly
probable that future economic benefit associated with it will flow to
the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realised. However, if
there are unabsorbed depreciation and carry forward of losses, deferred
tax assets are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realise the
assets. Deferred tax assets and liabilities are offset if such items
relate to taxes on income levied by the same governing tax laws and the
Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each balance sheet date for their reliability.
2.20 Impairment of assets
The carrying values of assets / cash generating units at each balance
sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
2.21 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes. Contingent assets are not recognised in the
financial statements.
2.22 Derivative contracts
"The Company enters into derivative contracts in the nature of foreign
currency forward contracts with an intention to hedge its existing
assets and liabilities, firm commitments and highly probable
transactions in foreign currency. Derivative contracts which are
closely linked to the existing assets and liabilities are accounted as
per the policy stated for Foreign currency transactions and
translations.
All other derivative contracts are marked-to-market and losses are
recognised in the Statement of Profit and Loss. Gains arising on the
same are not recognised, until realised, on grounds of prudence."
2.23 Operating Cycle
Based on the nature of products / activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non-current.
(ii) Terms/ rights attached to equity shares
The Company has only one class of equity shares entitled to one vote
per share.
(iii) Terms/ rights attached to Cumulative compulsorily convertible
preference shares (CCCPS)
5,038,168, 4.75% CCCPS at a par value of Rs.140 (Rupees one hundred forty
only) per CCCPS, payable semi-annually, are issued and allotted to
Templeton Strategic Emerging Markets Fund IV, which are convertible
into one equity shares of the face value of Rs.10 each against each CCCPS
on or before 18 September,
(iv) Terms/ rights attached to Warrant
763,359 Warrants at an issue price of Rs.140 per warrant ware issued and
allotted to Chandbagh Investments Limited on 19 March, 2013, entitling
the holder of each Warrant, from time to time, to apply for and obtain
allotment of one equity share of the face value of Rs.10 each against
each such Warrant within a period of 18 months from the date of
allotment i.e. on or before 18 September, 2014. (Also refer note 23.1).
(ii) Finance lease obligations from Banks of Rs. 111.67 lacs (previous
year Rs.29.84 lacs) and from financial institution Rs. 96.52 lacs (previous
year Rs.71.97 lacs) are secured by hypothecation of respective vehicles.
Payable on equivalent monthly installment basis, carrying interest rate
in the range of 8.79 % to 15.14 % per annum.
(iii) As at the year end, the Company has defaulted in compliance with
certain covenants on borrowings from banks, in which case, the lenders
reserves the right to recall the entire outstanding amount on immediate
basis. However, none of the lenders have exercised their options to
recall the outstanding amounts and as such, the term loans have been
classified as per the original terms agreed with lenders.
(ii) As at the year end, the Company has defaulted in compliance with
certain covenants on borrowings from banks, in which case, the lenders
reserves the right to recall the entire outstanding amount on immediate
basis and/or charge penal interest on amounts in default. However, none
of the lenders have exercised their options to charge penal interest or
recall the outstanding amounts and as such, the term loans have been
classified as per the original terms agreed with lenders.
Mar 31, 2013
(a) Basis of Prepration
The fnancial statements are prepared under the historical cost
convention on accrual basis of accounting and in accordance with
generally accepted accounting principles (ÂGAAP'') in India, applicable
Accounting Standards (ÂAS'') as prescribed by Companies (Accounting
Standard) Rules, 2006, provisions of the Companies Act, 1956 (Âthe
Act'') and guidelines issued by the SEBI, as applicable to the Company.
(b) Use of Estimates
The preparation of fnancial statements in conformity with generally
accepted accounting policies requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the fnancial
statements and the reported accounts of revenues and expenses for the
years presented. Actual results could differ from these estimates. Any
revision to these accounting estimates is recognized prospectively in
the period such changes are determined.
(c) Borrowing Costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost. Borrowing costs
directly attributable to the acquisition or construction of an asset
that necessarily takes a substantial period of time to get ready for
its intended use are capitalized as part of the cost of the respective
asset. All other borrowing costs are expensed in the period they occur.
(d) Fixed Assets (including Intangible assets)
Fixed Assets and Intangible Assets are stated at cost less accumulated
depreciation less impairment, if any. Cost of tangible fxed assets and
intangible assets comprises the purchase price and any attributable
cost of bringing the asset to working condition for its intended use.
Insurance spares are capitalized with the related mother asset from the
date such asset is put to use.
(e) Depreciation
Depreciation on Fixed Assets is provided on Straight Line Method as per
the classifcation and in the manner specifed in Schedule-XIV to The
Companies Act, 1956.
(f) Inventories
The basis of Determining the cost of the various categories of
inventories is as follows
Stores , Spare & fuel : Average Cost
Raw material & : Average Cost
Packing material
Finished Goods : Valued at cost or market
price Which ever is less
(g) Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classifed as current investments. All other investments are
classifed as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties. If an investment is acquired, or
partly acquired, by the issue of shares or other securities, the
acquisition cost is the fair value of the securities issued. If an
investment is acquired in exchange for another asset, the acquisition
is determined by reference to the fair value of the asset given up or
by reference to the fair value of the investment acquired, whichever is
more clearly evident.
Current investments are carried in the fnancial statements at lower of
cost and fair value determined on an individual investment basis. Long
term investments are carried at cost. However, provision for diminution
in value is made to recognize a decline other than temporary in the
value of the investments
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of Proft and Loss.
(h) Revenue Recognation
Sales are recognized on delivery or on passage of titles of the goods
to the customers. They are accounted net of sales return but inclusive
of excise duty.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head Âother income in the
statement of proft and loss.
Dividend income is recognized when the Company''s'' right to receive
dividend is established by the reporting date.
Export Beneft under the Duty Free Credit Entitlements is recognized in
the statement of proft and loss , when right to receive license as per
terms of the scheme is established in respect of exports made and there
is no signifcant uncertainty regarding the ultimate collection of the
export proceeds
(i) Employee Retirement Benefts
The company has various schemes of retirement beneft, namely Gratuity,
Leave encashment and Provident fund and Provisions for contribution to
retirement benefts scheme are made as follows
a) Provident fund on actual liability basis.
b) Provision for Gratuity, Bonus and Leave encashment has been provided
for as per actuary''s valuation method.
(j) Leases
Where the Company is the lessee
Finance leases, which effectively transfer to the Company substantially
all the risks and benefts incidental to ownership of the leased item,
are capitalised at the inception of the lease term at the lower of the
fair value of the leased property and present value of the minimum
lease payments. Lease payments are apportioned between the fnance
charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability.
Finance charges are recognized as fnance costs in the statement of
proft and loss. Lease management fees, legal charges and other initial
direct costs are capitalised.
A leased asset is depreciated on a straight-line basis over the useful
life of the asset or the useful life envisaged in Schedule XIV to the
Companies Act, 1956, whichever is lower. However, if there is no
reasonable certainty that the company will obtain the ownership by the
end of the lease term, the capitalised asset is depreciated on a
straight-line basis over the shorter of the estimated useful life of
the asset, the lease term or the useful life envisaged in Schedule XIV
to the Companies Act, 1956.
Leases where the lessor effectively retains substantially all the risks
and benefts of ownership of the leased item are classifed as operating
leases. Operating lease payments are recognized as an expense in the
statement of proft and loss on a straight-line basis over the lease
term.
Where the Company is the lessor
Leases in which the Company does not transfer substantially all the
risks and benefts of ownership of the asset are classifed as operating
lease. Assets subject to operating leases are included in fxed assets.
Lease income on an operating lease is recognized in the statement of
proft and loss on a straight-line basis over the lease term. Costs,
including depreciation are recognized as an expense in the statement of
proft and loss. Initial direct costs such as legal costs, brokerage
costs etc. are recognized immediately in the statement of proft and
loss.
(k) Earning Per Share
Basic earnings per share are calculated by dividing the net proft or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year is
adjusted for the events of bonus issue and share split.
For the purpose of calculating diluted earnings per share, the net
proft or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
(l) Taxes on Income
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the Company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Deferred income taxes refect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences of earlier years. Deferred tax
is measured using the tax rates and tax laws enacted or substantively
enacted, at the reporting date.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
suffcient future taxable income will be available against which such
deferred tax assets can be realized. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
profts.
At each reporting date, the Company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax asset to the extent
that it has become reasonably certain or virtually certain, as the case
may be, that suffcient future taxable income will be available against
which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The Company writes- down the carrying amount of
deferred tax asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that suffcient future
taxable income will be available against which deferred tax asset can
be realized. Any such write-down is reversed to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that suffcient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
(m) Impairment of Assets
The indicators listed in paragraph 8 of Accounting Standard (AS)-28 Â
impairment of assets  issued by Institute of Chartered Accountants of
India have been examined & on such examination , it has been found that
none of the indicators are present in the case of company . There is no
indication of a potential impairment loss, so estimation of recoverable
amount has not been made.
(n) Segment Reporting
In the opinion of the management, company is involved in only one type
of product Industrial & Potable Alcohol as envisaged by AS 17 ÂSegment
Reporting'', prescribed by the Companies (Accounting Standards) Rules,
2006. Accordingly, no separate disclosure for segment reporting is
required to be made in the fnancial statements of the Company.
Secondary segmentation based on geography has not been presented as the
Company operates primarily in India and the Company perceives that
there is no signifcant difference in its risk and returns in operating
from different geographic areas within India.
(o) Cash Flow Statement
Cash fows are reported using the indirect method, whereby proft before
tax is adjusted for the effects of transactions of a non-cash nature,
any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or
fnancing cash fows. The cash fows from operating, investing and
fnancing activities of the Company are segregated.
(p) Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction or that
approximates the actual rate at the date of the transaction.
Monetary items denominated in foreign currencies at the year end are
restated at year end rates. In case of items which are covered by
forward exchange contracts, the difference between the year end rate
and rate on the date of the contract is recognised as exchange
difference and the premium paid on forward contracts is recognised over
the life of the contract.
(q) Provisions
A provision is recognized when:
i. the Company has a present obligation as a result of past event;
ii. it is probable that an outfow of resources embodying economic
benefts will be required to settle the obligation; and
iii. a reliable estimate can be made of the amount of the obligation.
iv. Provisions are not discounted to its present value and are
determined based on best estimate required to settle the obligation at
the balance sheet date. These are reviewed at each balance sheet date
and adjusted to refect the current best estimates.
(r) Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confrmed by the occurrence or
nonoccurrence of one or more uncertain future events beyond the control
of the Company or a present obligation that is not recognized because
it is not probable that an outfow of resources will be required to
settle the obligation. A contingent liability also arises in extremely
rare cases where there is a liability that cannot be recognized because
it cannot be measured reliably. The Company does not recognize a
contingent liability but discloses its existence in the fnancial
statements.
Mar 31, 2012
(a) Basis of preparation
The financial statements are prepared under the historical cost
convention on accrual basis of accounting and in accordance with
generally accepted accounting principles ('GAAP) in India' applicable
Accounting Standards {'AS') as prescribed by Companies (Accounting
Standard] Rules' 2006' provisions of the Companies Act' 1&5G (the Act')
anti guidelines issued by the SEBl' as applicable to the Company.
(b) FIXED ASSETS {Including Intangible Asset)
Fixed Assets and Intangible Assets ere staled at cost less accumulated
depreciation less impairment' If any. Cost of tangible fixed assets
and intangible assets comprises the purchase price and any attributable
cost of bringing the asset to working condition for its Intended use.
Insurance spares are capitalized with the related mother asset from the
date such asset is pul to use-
(c) DEPRECIATION
The company has provided depreciation as per Straight line method In
accordance with schedule xiv of the companies act' 1956.
(d) INVESTMENTS
Investments are carried at lower of cost and fair value determined on
an Individual investment basis. Long- term inve & lmants are carried at
cost. However' provision for diminution has not been made in tha value
of the investments
(e) REVENUE RECOGNATION
Sales are recognized on delivery or on passage of titles of the goods
to the customers. They are accounted net of sales return but inclusive
of excise duty. Income from investments is accounted for in which right
1o receive of such in come is established.
(f) EMPLOYEE RETIREMENT BENEFITS
The company has various schemes of retirement benefit' namely Gratuity.
Leave encashment and Pro evident fund and ions for contrib.
utlon to retlremerrt benefitsà scheme a re ma de a s foil
(g) EARNING PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss for tha year attributable to equity shareholders by the number of
equity shares outstanding during the year. The Company has not issued
any potential equity shares' and accordingly' the basic earnings per
share and diluted earnings per share are the same.
(h) IMPAIRMENT OF ASSETS
The Indicators listed In paragraph 6 of Accounting Standard (AS)-26 '
Impairment of assets * Issued by Institute of Chartered Accountants of
India have been examined & on such examination r it has been found that
none of the Indicators are present in the case of company. There is no
indication of a potential impairments loss' so estimation of
recoverable amount has not been made'
(i) SEGMENT REPORTING
In the opinion of the management' company Is involved In only one type
of product Industrial & Potable Alcohol as envisaged by AS 17 Segment
Reporting"' prescribed by the Companies (Accounting Standards) Rules'
2006. Accordingly' no separate disclosure for segment reporting is
required to be mede in the fin a n ci a! statements of th g Co m pa ny.
Secondary segmentation based on geography has not been presented as tha
Company operates primarily in India and the Company perceives that
there is no significant difference in its risk and returns in operating
from different geographic areas within India.
(j) Other Notes to Accounts
(J) Deferred Revenue Expenditure
"Deferred revenue- Brand Promotion Expenses* appearing In Asset side in
the Balance Sheet are the expenditure Incurred on promoting company's
new IMFL brands already launched during Ihe year2007 and which have
perpetual benefit to the company and thus it was shown under the head
Deferred revenue- Brand Promotion Expenses' which is being written off
in five years & the current year being the fifth year' thus itis fully
written off.
(k) Taxes on Income
(i) Current tax is the provision made for the MAT payable during the
yearin accordance with the provisions u/s 115JB of the Income Tax Act.
1961
(ii) Current Tax is date rained as per the pro visions of the Income
Tax Act' 1961 in respect of Taxable Income for " the year. Deferred
tax Is recognized' on timing differences' being the difference
resulting from the recognition of items in the financial statements
& in estimating its current Income tax provision. Deferred Tax Assets
and Deferred Tax Liabilities are computed by applying tax rates and
tax laws that have been enacted or s substantively enacted by the
Balance Sheet Date. "
Mar 31, 2011
1. Basis of preparation of financial statements
The financial statements are prepared under the historical cost
convention on accrual basis of accounting and in accordance with
generally accepted accounting principles ('GAAP') in India, applicable
Accounting Standards ('AS') as prescribed by Companies (Accounting
Standard) Rules, 2006, provisions of the Companies Act, 1956 ('the
Act') and guidelines issuedby the SEBI, as applicable to the Company.
2. FIXED ASSETS (Including Intangible Asset)
Fixed Assets and Intangible Assets are stated at cost less accumulated
depreciation less impairment, if any. Cost of tangible fixed assets
and intangible assets comprises the purchase price and any attributable
cost of bringing the asset to working condition for its intended use.
Insurance spares are capitalized with the related mother asset from the
date such asset is put to use.
3. DEPRECIATION
The company has provided depreciation as per Straight line method in
accordance with schedule xiv of the companies act, 1956.
4. INVENTORY
The basis of determining the cost of the various categories of
inventories is as follows
Stores, Spares, & Fuel : Average cost
Raw material & Packing material : Average cost
Finished Goods : Valued at cost or market price which ever is less.
5. INVESTMENTS
Investments are carried at lower of cost and fair value determined on
an individual investment basis. Long- term investments are carried at
cost. However, provision for diminution has not been made in the value
of the investments.
6. REVENUE RECOGINATION
Sales are recognized on delivery or on passage of titles of the goods
to the customers. They are accounted net of sales return but inclusive
of excise duty. Income from investments is accounted for in which right
to receive of such income is established.
7. RETIREMENT BENEFITS
The company has various schemes of retirement benefit, namely Gratuity,
Leave encashment and Provident fund and Provisions for contribution to
retirement benefits scheme are made as follows
a) Provident fund on actual liability basis.
b)Provision for Gratuity and Leave encashment has been provided for as
per actuary's valuation method up to 31st March, 2011 amounting to
Rs.65,17,606/-
8. EARNING PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the number of
equity shares outstanding during the year. The Company has not issued
any potential equity shares, and accordingly, the basic earnings per
share and diluted earnings per share are the same.
9. IMPAIRMENT OF ASSETS
At each balance sheet an assessment is made whether any indication
exists that an asset has been impaired. If any such indication exists,
an impairment loss the amount by which the carrying amount is excess
against Recoverable amount is provided in the books of accounts.
Mar 31, 2010
1. ACCOUNTING CONVENTION
The financial statements are prepared under the historical cost
convention on accrual basis of accounting and in accordance with in
accordance with the relevant provisions of the Companies Act 1956 and
comply the Accounting standards specified to be mandatory by the
Institute of Chartered Accountants of India.
2. FIXED ASSETS (Including Intangible Asset)
Fixed Assets and Intangible Assets are stated at cost less accumulated
depreciation less impairment, if any. Cost of tangible fixed assets and
intangible assets comprises the purchase price and any attributable
cost of bringing the asset to working condition for its intended use.
Insurance spares are capitalized with the related mother asset from the
date such asset is put to use.
3. DEPRECIATION
a) The company has been charging depreciation on pro rata basis under
written down value method at the rates prescribed in schedule XIV of
the Companies Act till the FY 2008-09.
b) From 1 st April 2009, the company has decided to change the method
of charging depreciation to Straight line method as in its opinion it
would result in more appropriate presentation of financial statements.
c) The change of method has resulted in charging of excess depreciation
of Rs. 11,66,76,618/- till the start of this FY and has been written
back in the profit and loss account.
4. INVENTORY
The basis of determining the cost of the various categories of
inventories is as follows
Stores, Spares, & Fuel : Average cost
Raw materials Packing material : Average cost
Finished Goods : Valued at cost or market
price which ever is less.
5. INVESTMENTS
Investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution has not been made in the value
of the investments.
6. REVENUE RECOGINATION
Sales are recognized on delivery or on passage of titles of the goods
to the customers. They are accounted net of sales return but inclusive
of excise duty. Income from investments is accounted for in which right
to receive of such income is established.
7. RETIREMENT BENEFITS
Provisions for contribution to retirement benefits scheme are made as
follows
a) Provident fund on actual liability basis
b) Provision for Gratuity and Leave encashment has been provided for as
per actuarys valuation method up to 31 st March, 2010 amounting to
Rs.21,06,872/-.
8. EARNING PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. The
Company has not issued any potential equity shares, and accordingly,
the basic earnings per share and diluted earnings per share are the
same.
9. Impairment of assets
At each balance sheet an assessment is made whether any indication
exists that an asset has been impaired. If any such indication exists,
an impairment loss the amount by which the carrying amount is excess
against Recoverable amount is provided in the books of accounts.